Embracing the Future: The Rise of GenAI-Capable Smartphones
According to Counterpoint Research, a significant transformation is underway in the smartphone industry. By 2025, approximately one in three smartphones sold globally will be GenAI capable, leading to an impressive projection of over 400 million units. This growth reflects a marked increase from just one in five in 2024, illustrating a rapid adoption of GenAI technology in mobile devices. At the heart of this surge lies the advent of enhanced chipsets and more effective, lightweight large language models (LLMs) that empower these devices.
The Competitive Landscape
In the fiercely competitive smartphone market, brands like Samsung and Apple are positioning GenAI as a key selling point for their 2025 models. With their established ecosystems and premium market presence, these tech giants are expected to dominate the GenAI smartphone landscape. Samsung’s Galaxy AI and Apple’s Intelligence are poised to become household names, appealing to both tech enthusiasts and everyday consumers alike.
However, despite the robust technological advancements, consumer acceptance of GenAI features remains tepid. A significant hurdle is the lack of compelling features that resonate with everyday users. This has prompted Original Equipment Manufacturers (OEMs) to explore GenAI applications that can distinctly enhance user experiences beyond hardware improvements, as they seek to establish a clear value proposition for their offerings.
The Role of Consumer Electronics
While premium brands are setting the pace, Chinese manufacturers like OPPO, Xiaomi, HONOR, and vivo are expected to play a crucial role in driving GenAI adoption within mid-range smartphones by the end of 2026 or early 2027. If affordable, feature-rich GenAI smartphones become mainstream, companies like Apple could face a challenge to maintain their market share. Regions such as Western Europe, North America, and China are leading the charge in early GenAI smartphone adoption. In fact, nearly half of smartphone shipments in North America were GenAI capable in 2024, a figure projected to rise to 82% by 2028.
Features That Matter
The integration of personalized assistants, AI-driven content creation tools, and subscription-based services by tech behemoths like Samsung, Google, and Apple are pivotal in advancing GenAI adoption. However, consumer hesitation to invest in these AI features persists, largely due to perceived value and practical utility. OEMs must develop features that genuinely resonate with consumers, enhancing usability and everyday functionality, to stimulate demand.
Moreover, local manufacturers in China have been quick to incorporate AI capabilities into numerous devices, facilitating a swift adoption of GenAI smartphones in the region. By developing proprietary in-house LLMs, these brands are carving out a unique space in the domestic market. Amidst this, Agentic AI emerges as an innovative development expected to redefine the landscape by providing more context-aware, autonomous, and action-driven AI experiences—potentially surpassing existing GenAI solutions.
Looking Ahead: The Evolving Market Dynamics
As we move toward 2025, the smartphone industry is set for transformative changes. The dual forces of consumer demand and technological innovation will guide this evolution. Companies are expected to invest heavily in research and development to unlock the full potential of GenAI, driven by the competitive pressures from both established giants and agile newcomers in the market.
Furthermore, initiatives focusing on affordability and accessibility to GenAI capabilities will likely dictate future market dynamics. With the rapid pace of innovation, it will be essential for manufacturers to continually evaluate consumer needs and adapt their strategies accordingly. Companies that can successfully merge the promise of GenAI with practical applications are likely to lead the charge in this exciting new era of mobile technology.
As the smartphone landscape evolves, the convergence of hardware advancements, AI integration, and consumer-centric features promises to reshape how we interact with our devices, potentially revolutionizing the everyday experiences of millions around the globe.
